Offtake and Placement and Framework Agreement with Sinomine
- Prospect Resources Limited ("Prospect") executes conditional Placement and Framework Agreement with Sinomine Resources Exploration Co. Ltd. and Sinomine International Exploration (Hong Kong) Co. Ltd. (collectively "Sinomine").
- Conditional Placement and Framework Agreement includes the following parts:
o Placement and Framework Agreement - Sinomine to invest A$10,000,000 via a share placement in Prospect at A$0.05 per share.
o Offtake Agreement - Prospect agrees to sell:
-- 390,000 tonnes of Spodumene Concentrate; and
-- 1,097,000 tonnes of Petalite Concentrate;
over a proposed 7 year period priced using a market linked price which is referenced to Lithium Carbonate sold into China
o Lithium Carbonate Plant - Prospect can, at any time, build a lithium carbonate plant and divert 50% of the Petalite Concentrate to this facility and supply Lithium Carbonate to Sinomine under the Offtake contract
- The parties have also agreed indicative terms for a Facility Agreement and a Build and Transfer Contract. These term sheets (the parties must agree final terms within 3 months) provide:
o Facility Agreement Term Sheet - Sinomine fully finance the Build and Transfer Contract outlined below (see link below), including relevant working capital to take the mine to annualised production targets and Prospect will commence repayments of the facility upon shipment of first product under the Offtake Agreement.
o Build and Transfer Contract Term Sheet - Sinomine will:
-- Construct, build and commission the mine, tailings facilities, plant and equipment and all associated infrastructure for the Arcadia Lithium Project on a build and transfer basis;
-- Prospect will take ownership of the plant once the mine and plant have achieved 3 months of annualised production as per the above Offtake Agreement;
-- Prospect, in conjunction with Sinomine, will commission BGRIMM (Beijing General Research Institute of Mining & Metallurgy) to prepare a definitive feasibility study to be completed in 3 months. BGRIMM is the parent company of Easpring, one of China's leading lithium cathode producers;
-- Prospect and Sinomine establish a joint committee immediately to finalise design and implementation of the plant under the Build and Transfer Contract. Prospect has final sign-off on design, quality assurance and achievement of name plate capacity. Prospect intends to have staff based in China during the construction of the plant to ensure design standards are adhered to.
- Sinomine has operated in Zimbabwe for many years and has staff permanently based in Zimbabwe carrying out mining operations and drilling services with its head office based in Harare
- Prospect expects the Arcadia Lithium Project to be in production within 12 months from breaking ground
The Chairman of Prospect said: "The transaction will fully fund the building of Prospect's Lithium Mine and Plant at the Arcadia Lithium Project through to full production. This deal is the culmination of close to a year's work. During this time, we have developed a close relationship with Sinomine and we like their style and commitment to both the project and the Prospect Team. This is evidenced by the significant commitment to developing this important resource. Both teams are co-operating closely to integrate their considerable technical knowledge into a structured efficient roll out. As previously reported, the Prospect Team has been carefully assembled over the last 18 months in preparation for just such a scenario."
Mr Pingwei Wang, President & CEO of Sinomine said: "I am very pleased that Sinomine and Prospect can agree and sign the share purchase and offtake agreement today. As a listed company actively engaged in the mining industry and mining development on an international basis, Sinomine has the ability and confidence to work together with Prospect to develop the Arcadia Lithium Project in Zimbabwe. We believe through the cooperation of both parties, it will create value for the local community as well as shareholders of both companies."
The Arcadia Lithium Project contains the largest JORC Code reported lithium deposit in Africa, comprising ~808 000t contained lithium oxide (over ~2 000 000t contained lithium carbonate equivalent - LCE).
About Sinomine Resource Exploration Co. Ltd.
Founded in 1999, Sinomine Resource Exploration Co., Ltd., (hereinafter "Sinomine") originated from China Nonferrous Metal Mining (Group) Co., Ltd and is now a modern integrated geo-tech services company with head offices in Beijing, China. The company has been listed on the Shenzhen Stock Exchange (002738) since December 2014. The company now employs over 300 senior professional technicians and managers and its main business lines include solid mineral prospecting services, mining investment, resource evaluation services and international trade and logistics services. Sinomine operates to international best practice and regulations and standards in geo-tech services, such as JORC and NI43-101.
Sinomine has worked on projects with a number of large Chinese enterprises since the early 2000s as they undertook their "going out" strategies and investments, which were endorsed by the Chinese Government. As a result, Sinomine has completed a number of large international geological exploration projects for Chinese companies worldwide including in Zambia, Pakistan, Afghanistan and many other countries. Sinomine has the capability of taking a dozen large international geological exploration projects at a time. Sinomine also provides resource evaluation services on several international financing projects, focused on reducing the risks in resource investment and providing a basis for decision making. Sinomine has carried out exploration and mining activities in over 20 different countries around the world including Zimbabwe, Zambia, Congo (DRC) and has subsidiaries in each of these jurisdictions.
About Sinomine Resource (Hong Kong) International Exploration Co. Ltd.
Sinomine Resource (Hong Kong) International Trading Co. Limited is a wholly-owned subsidiary of Sinomine Resource Exploration Co. Ltd. Its business scope covers import and export of equipment, technology sales business including mechanical equipment and accessories, minerals, chemical products, and raw materials.
The company is based in Hong Kong and is dedicated to developing international markets in Eastern Europe and Southern African for its products and services. The company continues to build out its interests in international trade, mineral property investment and geo-technology services.
To view the Summary of Placement and Framework Agreements and Offtake Agreement, please visit:
About Prospect Resources Ltd
Prospect Resources Limited (ASX:PSC) is based in Australasia with operations in Zimbabwe and is a publicly listed company. We are committed to creating value for Prospect's shareholders and the communities in which our company operates. Our vision is to build a Southern African based mining company of international scale.
Prospect Resources Ltd